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It is precisely because Martha Nussbaum is so obviously one of the stars of the American academy that many people will be inclined to sit up and listen when she produces "a call to action" about "a worldwide crisis in education".

Her new book, Not for Profit: Why Democracy Needs the Humanities, certainly pulls no punches. "We are in the midst of a crisis of massive proportions and grave global significance," she writes, "a crisis that goes largely unnoticed, like a cancer; a crisis that is likely to be, in the long run, far more damaging to the future of democratic self-government (than the economic crisis of 2008)."

She fears that current major trends within education are "producing a greedy obtuseness and a technically trained docility that threaten the very life of democracy itself", and that "all modern societies are rapidly losing the battle, as they feed the forces that lead to violence and dehumanisation". At stake is whether we are going to end up with "a world that is worth living in".

Although she rightly stresses that the book is not only about the US or about higher education - there is much fascinating material about India, the other country she explores in depth - Nussbaum devotes much of it to how an essentially American liberal arts model of the university is faring at home and beyond.

Before we consider whether her claims are remotely convincing, it is worth looking back briefly over her career and the books she has published, most of them written in a notably less strident style.

Nussbaum is now Ernst Freund distinguished service professor of law and ethics at the University of Chicago. She studied theatre and classics before switching to philosophy, and even her more specialist books such as The Therapy of Desire: Theory and Practice in Hellenistic Ethics (1994) are clearly designed to address big moral issues rather than just determine what the Stoics and Epicureans happened to think.

While she is keen to engage with questions of public policy, she says she also sees her role as a philosopher as "helping readers deal with grief and stigma, shame and isolation, in their own lives". Her postbag reflects the impact she has had.

Upheavals of Thought: The Intelligence of Emotions (2001) draws on the work of St Augustine and Emily Bronte, Dante and Mahler, Plato and Proust, to argue that moral philosophy needs to take emotions seriously and "grapple with the messy materials of grief and love, anger and fear". Far from being "blind forces that have no selectivity or intelligence behind them", emotions are best seen as "forms of evaluative judgement that ascribe to certain things and persons outside a person's own control great importance for that person's own flourishing".

In order to root her account in lived experience and draw readers in, Nussbaum opens the book with a description of her mother's death, when grief led to "periods of agonised weeping; whole days of crushing fatigue; nightmares in which I felt altogether unprotected and alone, and seemed to feel a strange animal walking across my bed".

Hiding from Humanity: Disgust, Shame and the Law (2004) continued this line of work. Emotions, Nussbaum suggested, will always be important to law-making. When it comes to terrible crimes such as murder or rape, "it is reasonable to fear them when they are impending, to be angry about them when they occur, and to feel compassion when they happen to another". Jealousy, on the other hand, is never a good basis for public policy. So where do disgust and shame fit in?

Disgust, Nussbaum concedes, probably plays a useful role in human life, because "we cannot easily live with too much vivid awareness of the fact that we are made of sticky and oozy substances that will all too soon decay". But it is useless and indeed dangerous as a basis for legislation, since it has been "used throughout history to exclude and marginalise groups or people who come to embody the dominant group's fear and loathing of its own animality and mortality". Some people are disgusted by sodomy or pornography, others by Jews, the disabled or menstruating women. No one should be allowed to make laws by appealing to such feelings.

The book also includes a rather startling digression on short skirts, since "a precondition of genuine democracy was the recognition of women's equally human bodies; and this, in turn, required the overturning of puritanical conventions in dress, allowing women to show their legs". Given that this hardly led to the end of civilisation, "it seems wrong to think that society will collapse if gays and lesbians openly announce their sexuality, or even hold hands on the street in ways now acceptable among heterosexuals".

All of this fed into From Disgust to Humanity: Sexual Orientation and Constitutional Law (2010), which has influenced the debate on same-sex marriage. Yet Nussbaum's most significant contribution to policy issues probably comes from her books on liberalism and justice - The Quality of Life (with Amartya Sen, 1993) and Frontiers of Justice: Disability, Nationality, Species Membership (2006) - in which she spells out a so-called capability approach. This proposes a minimum threshold of conditions required for human dignity (and underpins the UN's Human Development Index, which tracks life expectancies and educational levels alongside standards of living). She also helped establish and plays a major role within the Human Development and Capability Association.

So Nussbaum has made many contributions to public life and produced a series of books notable for their ambition, range, humanity and determination to address vital real world issues such as underdevelopment and the oppression of women. She is also an enthusiastic supporter of a particular kind of education.

She is strongly opposed to the trend towards what her new book describes as "an education for profit-making" and strongly in favour of "an education for a more inclusive type of citizenship". More particularly, if we are talking about higher education, she likes the American liberal arts model, of which she stresses three central strands: critical and analytical thinking; broadening of the imagination, through literature and the arts; and an initiation into other cultural traditions that can help create "citizens of the world".

One of the advantages of such programmes, in which even people who want to study engineering or marketing are required to take courses in the humanities, in Nussbaum's view, is that it can often lead to "surprising awakenings. Exposure to something new can open students' eyes - again and again I've heard them talk about this."

She has written elsewhere about how the life of the mind helped her escape from a back-ground that was "very sterile, very preoccupied with money and status". She believes that universities can "make a difference", precisely because many students grow up within a peer culture that is "not very reflective".

"Going to university is only one part of a person's life," Nussbaum continues. "Students go home to their dorm and their friends, and before that they lived with their parents. We don't think it's reasonable to kidnap them, so we can only hope to have an impact in a very limited part of their lives.

"I like the small liberal arts colleges because they isolate these kids in some town where there's nothing happening and so can make the education a much more powerful part of their lives, with nothing to act as a counter-pressure. Then what you have to do is keep the parents out! Such colleges want to get the students' attention and make them part of a new community."

These are all attractive ideals, but Not for Profit also wants to argue that Nussbaum's model of education is both vital to democratic citizenship and now under dire threat.

Perhaps because she believes so much is at stake, Nussbaum takes a strikingly instrumental view of the value of the humanities in schools and universities. Her book warns against "artworks that reinforce uneven sympathies" and "defective forms of 'literature' (that) treat minorities, or women, as mere things with no experiences worth exploring". Even more prescriptive are her statements that "perhaps there is nothing more essential to the health of a democracy than having healthy images of what a real man is ... children need to learn that sympathetic receptivity is not unmanly".

Doesn't this run the risk of turning teaching into propaganda?

"I don't say the humanities have only one use," replies Nussbaum. "I'm focusing on their role in inculcating citizenship. You can also investigate works for their contribution to literary history, for their own sake as aesthetic objects. When you select a reading list for class, you do think about its impact on someone's overall development as a person.

"To really get into a work of literature, you have to let yourself be seduced - up to a point - but then you step back and talk about it. That is what a good class is like.

"The values I'm talking about won't survive and keep democracy stable without a robust critical culture in which you learn about and confront all the major views. Getting clear about your major values is an ongoing process, just as getting clear what a work of literature is actually saying is an ongoing process." She had herself recently decided that Julius Caesar was "a pernicious work", after looking at what Shakespeare had chosen to take and to omit from his sources, "because it reinforces the picture that the common people need an all-powerful father and are incapable of self-government".

As a teacher, adds Nussbaum, "you don't want to indoctrinate, you want to expose people and let them think for themselves why some things are bad and even allow them to fall under their sway while they are reading".

There remains the question of whether things are quite as awful as Nussbaum wants us to believe.

"I've never written a book with such a bleak vision of the future before," she explains. "Usually I think that's not a good thing to do. I wrote it only because I feel that a call to arms is needed now, so things don't get a lot worse more quickly. The one bright spot I did pick out was the US university and its liberal arts system - I think it's the healthiest of all.

"I'm much more bleak about universities in India, in Britain and in Europe in this respect because they've never had the liberal arts system. The British situation seems much more dire, partly because of the mentality that the humanities have to justify their existence through producing profit for industry - something that's been around since the Thatcher administration.

"When you have philosophy and literature built into required undergraduate courses, it's much harder to downsize those departments. As of now, the US is locked into this system of liberal arts education - people are still seeking out the liberal arts colleges at a time of very intense competition."

This is surely an odd sort of crisis. Last week's report from Lord Browne of Madingley's review of higher education funding and student finance, Securing a Sustainable Future for Higher Education, certainly raises worrying concerns about the longer-term future of the arts and humanities within British universities. Yet the liberal arts model has never been whole-heartedly embraced in much of the world - and what has never existed can hardly be described as under threat.

In the US, Nussbaum can point to examples of departments closed, courses demoted from core curricula, politicians who argue that education should concentrate on useful subjects that lead to jobs. Even President Obama, him-self very much a product and beneficiary of a liberal arts education, has praised Singapore and the nations of the Far East for focusing their teaching on science and technology rather than "things that don't matter".

These signs may be worrying and worth watching, but they hardly suggest an educational system on the brink of disaster. Furthermore, when it comes to the specific elements of Nussbaum's educational ideal, there seems at least as much good news as bad.

"In terms of critical and analytical thinking," she elaborates, "philosophy departments have been contributing to core curricula ever since I started looking at the issue in the late 1980s. I don't think that has changed a lot, but philosophy like all the humanities is under siege from a range of 'useful' disciplines. They are beginning to look useless to some people. Under Larry Summers (president from 2001 to 2006), Harvard considered the elimination of courses in moral reasoning. It is happening all over, although state universities are under more pressure than private universities - but private donors are also swayed by fashion.

"Broadening the imagination has been going along pretty nicely, with lots of courses in the arts and humanities as part of core curricula. Even the postmodernist theorists (whose work Nussbaum has savaged elsewhere), when they actually teach literature, do it with a love of literature and so broaden the imagination."

As for giving students an international perspective, US (and no doubt other) universities are now doing far better than in the past. Nussbaum recalls how she "was able to go right through an undergraduate education without hearing anything about Buddhism or Islam. There was a terrible, terrible lack there - and you can't understand the distinctiveness of the Western tradition until you compare it with something else." While things are by no means perfect, there has certainly been a broad improvement on this score.

If this seems a mixed and even reasonably cheerful picture, Nussbaum is also honest enough to refer to a number of specifically American factors that prop up her educational ideals. "The liberal arts portion of US college and university curricula", Not for Profit points out, "still attracts generous philanthropic support" (which even increased during the recent economic crisis), so institutions can rely on wealthy alumni "whose educational values pretty well match our own" as well as "tax incentives for charitable donation and a long-established culture of philanthropy".

In the light of all this, it is hard to see why prospects are quite so dire, at least within US higher education, as the rhetoric of Nussbaum's book requires. As a result, she is driven to somewhat desperate attempts to spot auguries of doom. Perhaps the most ludicrous is her comment that even at the University of Chicago, "in what might seem to be a secure bastion of the humanities, there are signs of trouble" - namely that the prospectus for applicants has recently been modified "to show lots of students in gleaming laboratories, and no students sitting and thinking". This may be deplorable, but if it is meant as a serious indication of a cancer-like crisis likely to prove more damaging than the economic collapse of 2008, we really can stop worrying.

In the light of a number of cuts, Nussbaum writes in Not for Profit, "we in the United States cannot be complacent about the health of the humanities". Only her fellow Americans can decide whether she paints an accurate or an unduly pessimistic picture of what is happening there. Those struggling within education systems far less cosseted and well funded may feel that her polemic manages to be plaintive, overheated and complacent all at the same time.

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